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Overcontributed to Your IRA? Fix It by October 15 to Dodge the 6% IRS Penalty
Original: Put $500 Too Much in an IRA and the IRS Charges 6% Every Year It Stays There. Pull It Out by October 15 and the Penalty Is $0
Taxpayers who put even a small amount too much into an IRA face a 6% excise tax from the IRS for every year the excess stays in the account. The charge can be avoided entirely by withdrawing the excess contributions and any earnings before the extended tax-filing deadline of October 15. Personal finance writers are highlighting this fix-it window as an easy way to erase the penalty.
Why now: The October 15 extended filing deadline is approaching, making this the last chance for many taxpayers to correct excess IRA contributions penalty-free.
Evidence
- Put $500 Too Much in an IRA and the IRS Charges 6% Every Year It Stays There. Pull It Out by October 15 and the Penalty Is $0 · 24/7 Wall St.
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